ATF: Phoenix Gun Dealer Supplied Mexican Drug Cartels

Just hours after receiving a shipment of weapons allegedly intended for Mexican drug bosses, a Phoenix gun dealer and at least two alleged arms traffickers were arrested this morning in a series of raids by federal and local authorities. Authorities allege the gun dealer sold more than 650 AK-47-type assault weapons to Mexican drug gangs responsible for recent shootouts that have claimed dozens of lives.

"He knowingly, willingly sold these weapons, and he even gave our guys undercover tips on how to evade the police," Pete Forcelli, the Alcohol, Tobacco and Firearms supervisor on the case told ABC News. The gun dealer, George Iknadosian, 46, was arrested on numerous Arizona state charges, and all of the inventory in his shop was seized.

"We know of 650 assault weapons he sold," said Forcelli, a former New York Police Department Bronx homicide detective. "But by the time the case is done, it will be well over a thousand."

Authorities in Phoenix, Ariz., told ABC News the raids are part of a continued effort to curb the supply of high-quality weapons from the U.S. to Mexico.

"Let's be very clear here -- there's a war going on in Mexico right now, and innocent people are being caught in the crossfire, not to mention the hundreds of police officers being murdered," said Alcohol, Tobacco and Firearms' Bill Newell, the special agent in charge of the Phoenix office. "When 90 percent-plus of the firearms recovered from these violent drug cartels are from a U.S. source, we have a responsibility to do everything we can to stem the illegal flow of these firearms to these thugs."

Those firearms -- including high-powered assault rifles and "cop killer" handguns -- are often bought through "straw purchasers" from legal gun dealers in California, Texas and Arizona. They are responsible for 95 percent of the gun violence in Mexico, U.S. and Mexican authorities have told ABC News' Brian Ross.

One of them, a Colt .38-caliber semi-automatic pistol traced back to X Caliber was tucked into the waistband of alleged Sinaloa drug cartel boss Alfredo Beltran Leyva when he was arrested in Mexico last January. The alleged cocaine dealer had $900,000 in cash in his possession when arrested along with two body guards, Mexican authorities said.

"I just learned from Mexican authorities that more law enforcement officers were killed in Mexico last year than all the people killed in New York, Philadelphia, Newark combined," Forcelli said. Mexican authorities told ABC News more than 2,000 law enforcement officers have been killed in the past 18 months.

According to Alcohol, Tobacco and Firearms officials on the scene, two traffickers were arrested at their homes shortly after taking a delivery of a shipment of semi-automatic weapons, and the gun dealer was arrested and the entire inventory of his store, X Caliber Guns, was seized.

According to federal and local officials, the investigation began after an ATF review of X Caliber's records showed "an obvious pattern of firearms purchases consistent with firearms trafficking." Two individuals were identified who authorities said were acquiring firearms for the purpose of sending those firearms to individuals in Mexico. Those alleged traffickers were Hugo Gamez, 26, and his brother, Cesar Gamez, 27.

During undercover purchases over the past several weeks, AK-47 variant firearms were purchased, and conversations were recorded, which, authorities said, "clearly show [the gun store] aided in the illegal purchase of firearms by firearms traffickers by allowing firearms to be added to previously filled out [federal forms] 4473s, by allowing individuals to pay for firearms."

According to authorities in Arizona, the case will be presented to an Arizona grand jury during the week. The subjects face charges of conspiracy, fraud schemes and artifices, conducting an illegal enterprise, money laundering and misconduct involving weapons (firearms).

"Ninety-nine percent of the gun dealers in the country are legitimate and follow the law, but this case shows the negative impact one percent can cause," said ATF agent Carlos Baixauli.

"We must do everything within our designated authority to stop the flow of firearms to the violent drug cartels operating on both sides of the U.S./Mexico border," Newell said.